Lessons From the Death of Seattle’s ‘Amazon’ Tax

Lessons From the Death of Seattle’s ‘Amazon’ Tax

A strong housing movement needs strong politicians as allies.

June 22, 2018

Supporters at left of a tax on large companies face off against opponents of the tax at City Hall in Seattle, June 12, 2018. (AP Photo / Ted S. Warren)

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For roughly a month, the City of Seattle seemed to be at the vanguard of a new affordable-housing movement, an emblem of what government can do when elected representatives heed the demands of a mobilized working-class constituency.

On May 14, after facing down bitter opposition from corporate giants like Amazon and Starbucks, Seattle passed an ambitious new tax on the city’s largest employers. The “Amazon tax,” as advocates called it, aimed to raise roughly $47 million a year over five years to fund affordable-housing development and fight homelessness in a place plagued by rising rents, ubiquitous gentrification, and spreading displacement. The proposal’s victory at City Hall was the latest show of strength for a robust housing-justice movement that has won a host of local rent regulations in recent years by making common cause with key municipal leaders in Seattle.

The push for the measure began last fall when two Seattle councilmembers introduced a proposal for a tax on large companies. They were promptly backed by housing activists who assembled a broad coalition of organizations to fight for the measure. Calling themselves the Housing for All Coalition, they launched a concerted pro-tax campaign that featured signature gathering, town-hall meetings, direct action, and a flood of phone calls and e-mails to resistant councilmembers. And the councilmembers seemed to listen: Four signed on to sponsor the legislation, and all nine ultimately voted for it.

“We were able to get a unanimous vote on [the] City Council to tax the largest businesses in Seattle to build hundreds of units of publicly owned and permanently affordable housing because we have a fighting movement on the ground,” says the socialist City Council member Kshama Sawant, one of the movement’s principal political allies and an ardent proponent of the Amazon tax.

This interplay between grassroots organizers and committed political allies is unusual in the realm of affordable-housing policy. While the political class has, for the most part, been slow to reckon with the affordable-housing crisis, the Seattle tax tapped into an awakening sense of urgency among municipal leaders, both in Seattle and beyond. As the fight heated up, local progressive officials from across the country came out to back it. In an act of novel cross-city solidarity, more than 50 members of the progressive political network Local Progress signed an open letter to Seattle expressing “strong support” for the tax, while local officials in the Bay Area and Silicon Valley began murmuring about passing their own big-business taxes. A handful of national leaders—including Senator Bernie Sanders and Representative Pramila Jayapal—even weighed in.

For a moment, it almost seemed the city that helped launch the Fight for $15 movement might give birth to a new affordable-housing paradigm, one that would fund municipally owned and other affordable developments using tax revenue from corporate giants.

And then, on June 12, Seattle’s City Council reversed course. Facing mounting pressure and real political peril as Amazon and other major businesses mounted a fierce campaign to turn local sentiment against the tax—and the politicians that supported it—the City Council capitulated and voted 7 to 2 to repeal the measure. Local housing organizers were deeply dismayed.

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“It is crazy,” says Katie Wilson, who chairs the Housing for All coalition. “And it is a reflection of the real power that our movement has right now, which is not that much.”

The rollback of the Amazon tax was a devastating setback for housing-justice advocates in Seattle and beyond. It revealed just how much work the rising housing-rights movement still needs to do if it wishes to build political power, and it served as a reminder of the ruthless, strong-arm tactics that business interests are all too willing to employ to crush movements that try to hold them accountable. But it also shed light on something else: the constrained and complex role of politicians in the affordable-housing struggle, and the fear that has kept so many politicians from trying to tackle the housing crisis in the first place.

“There are far too few elected officials who are willing to stake their careers on housing as an issue,” says Tara Raghuveer, the housing-campaign director for People’s Action, a national grassroots coalition of housing, economic, and racial-justice groups that has been fighting the Trump administration’s proposed cuts to public housing in recent months. She cites the influence of the real-estate lobby, as well as the relative absence in recent decades of an enduring tenants’-rights movement, as the principal causes of this problem. Still, she says, it “represents a disjuncture between the understanding of elected officials about what matters to Americans and what actually matters to Americans.”

“My experience,” she adds, “is that if you go knock doors in any community in the US, one of the top three issues is how much they pay in rent, or how much their mortgages are, or the impending gentrification of their neighborhood.”

When asked about progressive politicians in the United States that do stand out for their housing advocacy, Raghuveer, like other organizers interviewed for this story, could name a paltry few. At the national level, she pointed primarily to Representative Keith Ellison of Minnesota, the chief sponsor of the Common Sense Housing Investment Act, which would phase out the mortgage-interest tax deduction and funnel hundreds of billions in savings over 10 years to affordable- and public-housing programs. Sadly, the bill has not made much headway in the House, where it has a mere nine co-sponsors, most of them progressive Democrats like Barbara Lee of California. Ellison, moreover, won’t be operating at the federal level for much longer. He is preparing to leave Congress as he launches a bid to be Minnesota’s next attorney general.

Other national progressive leaders, like Senator Bernie Sanders and Senator Elizabeth Warren, have not made housing their central focus. While Sanders did weigh in on the Amazon tax via tweet, the senator from Vermont is primarily concerned with his Medicare for All and free public-college platforms. Warren, meanwhile, has made bank regulation and consumer protection her priorities, although she did acknowledge the critical necessity of affordable housing in a statement to The Nation.

“Washington,” Senator Warren said in a statement, “should make affordable housing a priority because it is the foundation families need to build a path into the middle class. Families in America shouldn’t have to win the housing lottery for a chance to build a future.”

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For Raghuveer, the relative dearth of national political leadership concerning the housing crisis is a missed opportunity for progressive politicians.

“Housing is a central tension for most Americans these days and that makes it extremely strange, and kind of baffling, that we don’t have a more robust political conversation about it,” she says.

When that conversation does occur, it takes place primarily at the local level. It takes place in Seattle, with its ongoing renters’-rights struggle. It takes place in Austin, Texas, where a coalition of grassroots groups and progressive City Council members are currently pushing for a massive new affordable-housing bond. It takes place in Richmond, California, where local officials aligned with the Richmond Progressive Alliance, or RPA, managed in 2016 to push through the first new rent-control law in the state in decades.

“For most politicians there isn’t a willingness to confront the real-estate industry, to confront the apartment association, but that is what you have to do to make change,” says the RPA’s Gayle McLaughlin, a former City Council member and mayor of Richmond who strongly backed rent control there. “We confronted the apartment association in Richmond to get rent control passed.”

As in Seattle, Richmond’s City Council passed a rent-control ordinance in the city in 2015, only to later rescind it in the face of fierce opposition from real-estate interests. But progressives there didn’t back down—they went on to put rent control on the 2016 ballot, where it won resoundingly. It’s this sort of persistence, this willingness to flout the power of developers and landlords and big business, that will be required if the tenants’-rights movement is to gain sufficient electoral influence in the United States.

“First and foremost, we need to change how political campaigns are funded,” says Raghuveer. “What corporate financing is to federal campaigns, landlord and developer financing is to state and especially local campaigns. In most places, we run into a dynamic where progressive elected officials are with us on every other issue—health care, immigration, education, climate—but they are not with us on housing, and that is because they are funded by a developer class.”

She says the housing movement needs to lift up candidates for office who are willing to forgo real-estate-industry contributions and risk their careers on behalf of housing justice.

There have been promising developments on that front in recent months.

Consider New York, where at least two high-profile candidates this year have made housing a central plank of their political platforms, while spurning campaign cash from landlords, developers, and the like. It is likely no coincidence that both of them are also running insurgent primary challenges against centrist Democratic incumbents.

One is Alexandria Ocasio-Cortez, the insurgent primary challenger facing off against establishment Democrat Joe Crowley in New York’s 14th district. While running on a platform that includes Medicare for All and the abolition of Immigration and Customs Enforcement, Ocasio-Cortez has also maintained a consistent focus on “housing as a human right.” Among other things, she has refused corporate campaign contributions, including money from the real-estate industry. She has talked relentlessly about the problems of rising rents, spreading gentrification, and homelessness in New York. She has promised to take on the political power of luxury developers. And she has announced her support for Keith Ellison’s Common Sense Housing Investment Act. Yet Ocasio-Cortez has been spurned by national Democrats, most of whom are either staying out of the race or have endorsed her developer-backed opponent.

The other notable candidate is Cynthia Nixon, who is challenging New York Governor Andrew Cuomo in the Democratic primary. Like Ocasio-Cortez, Nixon is saying no to corporate campaign contributions. Like Ocasio-Cortez, she has slammed her opponent for his ties to the real-estate industry. And she, too, has rolled out an ambitious and uncompromising housing-justice platform.

“Cynthia’s housing platform was developed in conversation with community organizers, policy experts, and tenants who have been working on these issues for many years,” said campaign spokesperson Lauren Hitt in a statement, in which she described the plan as the country’s most “expansive” tenant protection program. “It will provide affordable homes to more than 3 million households, help to curb our state’s homelessness crisis, and prevent thousands of evictions.”

Among other things, Nixon’s “Rent Justice for All” platform includes a call to close all loopholes in New York’s rent-stabilization laws and expand those laws across the state. She also supports the establishment of statewide just-cause-eviction protections that would prevent renters from being arbitrarily evicted by their landlords. By contrast, the man she is challenging, Governor Andrew Cuomo, counts among his top donors many of the most powerful real-estate developers in New York.

For housing organizers in New York, Nixon’s platform is a hopeful sign of what tenants’-rights activists might accomplish if they manage to unite into a cohesive force and press their cause at the state and national levels.

“I think one of our challenges as a movement is that people see the housing issue as a local issue—which it is, of course. But that means that folks often focus targeting on places like the community board or the local City Council person, and that lets state and national politicians off the hook for developing strong progressive platforms on the issue,” says Cea Weaver, the research and policy director at New York Communities for Change and an organizer with the Democratic Socialists of America. “For example, if tenants acted as a voting block in New York State, Cuomo would not be in office.”

The housing-justice movement, though, has a big lift if it wants that sort of potent political muscle. Back in Seattle, after all, housing activists are still regrouping from the City Council’s Amazon tax repeal. Asked whether the local movement might try to follow the Richmond playbook and put the tax on the ballot, Katie Wilson said that she would like to see such an initiative next year. The city’s Housing for All coalition, though, does not yet have firm plans about how it will move forward.